The UK government has reportedly rejected recommendations by the Treasury Select Committee that suggested stricter regulations on bank lending to small businesses SMBs Reports in The Guardian Friday Jan 11 said policymakers are speaking out against the governments decision to not regulate small business lending arguing that it leaves SMBs unprotected despite a slew of bank scandals impacting small business owners Whilst the Financial Conduct Authority FCA has noted that it is reasonable for government and parliament to assess what it regulates the government has flat out and wrongly refused to bring commercial lending into regulation said Nicky Morgan chair of the committee The FCA must be given the powers to provide protection to SMBs now If the government continues to bury its head in the sand scandalous events such as those at RBS Global Restructuring Group could reoccur A government investigation into RBS found that the bank unfairly pushed some small business clients into its Global Restructuring Group leading to additional financial burdens and in some cases bankruptcy for some of those firms Last October RBS CEO Ross McEwan spoke with reporters noting that a lack of industry regulation allowed such mistreatment against small businesses to occur In response to the Treasury committees recommendation the government stated it does not believe there is a clear case to introduce small business lending regulation pointing to higher costs to lenders that could be passed onto borrowers The government also noted that bank behavior changed significantly following the 2008 financial crisis and added that banks are signing up to an industry code to promote best practices The government and the FCA are betraying British businesses while acknowledging they are the backbone of this country because they are unwilling to take on the big banks said Nikki Turner director of small business advocacy group the SME Alliance The idea that because the banks are not behaving as badly as they did a decade ago its all OK is like inviting Hannibal Lecter to dinner because he hasnt killed anyone recently LATEST INSIGHTS Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation thats reshaping the payments and commerce ecosystem Check out the latest PYMNTS Digital Drive Report B2B B2B Payments bank regulation FCA Government News RBS scandal SMB SMB Fiannce SMB lending treasury UK Whats Hot In B2B